2. Johnson Company had Sales of $340,000, Variable costs of $180,000, Contribution Margin of $160,000, frxed costs of $70,000, and income from Operations $90,000. Compute Johnson Company's operating leverage. 3. Donald Company has foxed costs of $480,000. It has a unit-selling price of $6, unit variable costs of $4,40, and a target net income of $1,500,000. Compute the required sales in units to achieve its target net income. 4. For Murphy Company, actual sales are $2,000,000, and break-even sales are $1,500,000. Compute (a) the margin of safety in dollars, and (b) the margin of safety ratio. 5. For Rockett Company, sales are $500,000, variable costs are $200,000, and foxed costs are $240,000. Compute (a) the contribution margin in dollars, (b) the contribution margin ratio. 5. For Rockett Company, sales are $500,000, variable costs are $200,000, and fixed costs are $240,000. Compute (a) the contribution margin in dollars, (b) the contribution margin ratio. Formula Hints EUFIFO = EUBWIP + USC + EUEWIP VCPU=CITC/CIA (HLM) CMS =SRVC UCM=USPUVC CMR=UCM/USP BEPU =FC/UCM BEPS=FC/CMR TSUTN1 =(FC+TNI)/UCM TSSTNI=(FC+TNI)/CMR MSS = AS - BES MSR= MSS / AS OL=CM/INCOP